The Effects of Automatic Stabilizers on the Federal Budget
"In March 2011, the Congressional Budget Office (CBO) released its most recent baseline projections of federal revenues, outlays, and budget balances for the next 10 years. For those projections, CBO assumed the continuation of current laws and policies that affect taxes and mandatory spending programs and extrapolated the growth of discretionary spending by using projected rates of inflation. CBO estimated in March that the baseline budget deficit will rise from $1.3 trillion in fiscal
year 2010 to $1.4 trillion in 2011 and then will average $692 billion over the next five years. At 9.3 percent of gross domestic product (GDP) in 2011, the deficit in
those terms will be the second largest in more than half a century (behind only the 2009 deficit, which was 10.0 percent of GDP). By comparison, CBO projects that the deficit will average 4.1 percent of GDP during the five years from 2012 through 2016 if current laws remain in place..."